Pacific trading partners hope to have a free trade agreement ready to present to the public and stakeholders in November, U.S. President Barack Obama said on Friday.

More specifically, he is quoted as saying:

"Our hope is by the time we see each other again in November, when I travel to Asia, we should have something that we have consulted with Congress about, that the public can take a look at, and we can make a forceful argument to go ahead and close the deal," he told reporters after the meeting.

As the Reuters article notes, that comes as something of a surprise since the talks seemed to have ground to a halt recently, despite original hopes that they would be finished last year. Indeed, some participants remain pessimistic:

Australian Trade Minister Andrew Robb, who visited the United States last week, was reported as saying on June 18 there was no chance of a deal this year, though he hoped it could be concluded in the first half of 2015.

That uncertainty raises the question: what exactly does the President's statement mean? Is it just an attempt to give some momentum to the talks by setting a new deadline? Will there really be a document released in November? And even if there is something that the public "can take a look at" then, what exactly will that be? The full text of the agreement? That seems unlikely; what President Obama has in mind is probably some sanitized summary.

Still, the very fact that he has made this comment, however vague and unsatisfactory it might be, suggests that the increasingly-widespread calls for transparency are having some effect. We obviously need to keep it up.

from the hardly-fair dept

Big pharma companies exert considerable influence on US trade policy. Research by the Sunlight Foundation shows that the pharmaceutical industry has been lobbying for the measures it wants in TPP longer and more consistently than any other sector. For example, one of the most important -- and contentious -- chapters of TPP is about keeping drug prices artificially high. Big pharma has also been vocal in calling for the European Union to be put on the Special 301 Report's "Priority Watch List" for daring to require that basic safety data about drugs be made available. Given this wide-ranging support from the US government, you'd think that pharmaceutical companies would be only happy to pay back in the form of taxes, say, but as Quartz points out, that's far from the case:

Pfizer's bid to purchase AstraZeneca failed, but the company's attempt to move to London in an effort to avoid US corporate taxes has inspired a new round of commentary on America's corporate tax system. Perhaps it should also spur a look at America's commitment to raising drug prices around the world.

The US taxes the global income of its companies, which has lead many of the largest to keep profits overseas indefinitely to avoid paying Uncle Sam, and even shift US profits overseas to avoid public levies. So-called “inversions” -- reverse mergers where a US company buys a foreign one and assumes their jurisdiction, as Pfizer proposed -- have also become more popular. Four US pharmaceutical companies have used the tactic to go overseas in the last year, and four more are considering similar moves.

It's probably too much to hope that the US government will abandon its unquestioning support for the pharmaceutical industry, but if more drug companies do relocate overseas to avoid paying US taxes, the public outcry against it doing so may grow.

The policies of other TPP nations criticized by the 384-page USTR report include New Zealand's popular health programs to control medicine costs, an Australian law to prevent the offshoring of consumers' private health data, Japan's pricing system that reduces the cost of medical devices, Vietnam's post-crisis regulations requiring banks to hold adequate capital, Peru's policies favoring generic versions of expensive biologic medicines, Canada's patent standards requiring that a medicine's utility should be demonstrated to obtain monopoly patent rights, and Mexico's "sugary beverage tax" and "junk food tax."

None of those is a real trade "barrier", but rather a policy choice seeking to bring about certain results that presumably correspond to the wishes of the local electorate. The cultural aspects of these so-called "barriers" are even clearer in the case of Malaysia:

The report takes issue with Malaysia's "extremely high effective tariff rates" on alcohol and its strict licensing policy for the importation of pork -- strange "barriers" to highlight in a country where three out of every five people are Muslim. Malaysia's halal standards for meat have also been targeted as a "barrier" in a companion USTR report on Technical Barriers to Trade (published in 2013, the most recent edition available). USTR is concerned that Malaysia requires "slaughter plants to maintain dedicated halal production facilities and ensure segregated storage and transportation facilities for halal and non-halal products."

Again, it's quite evident neither of those has anything to do with "market distortions", and everything to do with the fact that Islam is an important cultural element of Malaysian society. It is only natural that its laws and regulations should reflect that. Similarly, the following is likely to be an expression of Japanese society itself, not some evil plan to shut out foreign companies:

The report critiques Japan's laws protecting the privacy of citizens' personal data, calling them "unnecessarily burdensome." The U.S. government, according to the report, "has urged the Japanese government to reexamine the provisions and application of the Privacy Act, so as to foster appropriate sharing of data..."

Presumably those laws were passed because the Japanese value their privacy, and specifically wish to limit the sharing of personal data. But the USTR seems to think it is reasonable to demand that Japanese society change its attitudes in order to make the laws less "burdensome" to US companies operating there. The Japanese section also contains the following:

The report calls for "timely and accurate disclosure" of key texts related to Japan's postal reform, and "public release of meeting agendas, meeting minutes, and other relevant documents." In contrast, leaks have revealed that the United States and other TPP countries have agreed to keep TPP texts classified until four years after the agreement enters into force or talks collapse.

The lack of transparency for TPP is no simple matter of hypocrisy: it is an assault on local democracy. That's because the TPP negotiations are not haggling over a few tariffs, they are imposing a wide range of economic and social norms for an entire region. Conducted in secret, without any meaningful input from the people who will be most affected, these new-style agreements undermine the usual legislative process. This shift is yet another reason why TPP, TTIP and TISA must be opened up to allow greater public participation and input. If they are not, they are likely to be perceived as something imposed from above, and lacking in legitimacy. That's precisely what happened with ACTA; it led to tens of thousands of people taking to the streets, and ultimately rejection by the European Parliament.

from the good-stuff dept

A couple years ago, a Congressional staffer named Derek Khanna wrote a fantastic policy brief on copyright, arguing for a variety of sensible reforms, including bringing copyright term downward to a much more reasonable level. You know what happened next. Hollywood went ballistic and called on its favorite politicians, who attacked the report and Khanna, leading to the report being yanked -- despite having gone through a full review process -- and Khanna not being retained in his job.

Since then, Khanna has been working on a number of policy and advocacy campaigns and, working as an R Street Associate Fellow, he's put together a fantastic paper that delves much deeper into the copyright term issue and argues convincingly for greatly reducing copyright term length and also revisiting whether or not copyright should even be included in international treaties. The full paper is well worth reading, detailing just how distorted copyright has become from its original purpose.

The paper does a great job talking about how a return to more original copyright principles makes sense. Furthermore, it notes that there is no credible economic evidence that longer copyright terms are good for the economy or the public, and in fact, nearly all of the actual evidence says quite the opposite. It discusses the increasing clout and power of the Hollywood lobbying industry which has made copyright term extension a regular feature, based on FUD and fears about how terrible the world would be if there were a thriving public domain. And, of course, on the flip side, he details the many, many problems created by copyright that is way too expansive, including orphan works, culture disappearing and basic censorship.

The disparity between the founders’ copyright of 14 years
and modern copyright terms that last longer than anyone
could ever be alive, is particularly glaring to modern audiences. This is because there has been more research on the
cost of these ridiculously long terms, but also because today
everyone is a content creator in a way that average people
were not in the early 20th century. Justifying why our personal e-mails, Facebook posts and tweets should be protected
under copyright for our lifetimes plus 70 years doesn’t seem
to meaningfully fulfill the constitutional mandate of promoting the progress of the sciences.

Further, social norms on those forms of creation differ
extremely far from what the law is. Of course, this does not
justify large-scale piracy, but social norms are such today
that forwarding an e-mail from a friend is not perceived as
a potential legal problem. However, under many readings
of the copyright statutes, your e-mails are copyrighted and
forwarding an e-mail without permission, especially if the
e-mail says not to forward it, could be copyright infringement, making one liable for a $150,000 fine.

The paper also takes on the current negotiations on the Trans Pacific Partnership (TPP) agreement, in which some have looked to extend copyright even further, while others (including the US) appear to want to lock-in the current life+70 as a minimum, even as many (including the head of the Copyright Office) have suggested that we may want to think about cutting back copyright term length. The report shows how things like the TPP can interfere with legitimate copyright reform:

If the White House signs a treaty that makes
such reforms impossible, that would have significant deleterious effects on the reform effort. By removing any prospect
of reform from the table, it would be a nearly unprecedented policy coup for the content lobby in their attempt to effectively repeal the Constitution’s Copyright Clause.

The TPP, as leaked, is a clear illustration of policy laundering.
Special interests can’t defend life+70 copyright terms in the
United States, so instead they use an international treaty-making process to tie Congress’s hand. The content lobby
has done this effectively with numerous other treaties; this
has been their modus operandi for decades. But unlike other
treaties involving copyright and patents, this treaty process
has been subject to unprecedented secrecy: even members of
Congress initially were unable to access the treaty

Of course, this doesn't even get into the fact that part of the reason copyright terms are so long is an international agreement from over 100 years ago: the Berne Convention Treaty, which is a massive impediment to necessary copyright reform. And yet, rather than fix that, it appears that the US government is seeking to extend it even further through other agreements.

from the well,-that-would-appear-to-be-your-own-fault dept

It's become fairly clear that the TPP agreement is in trouble these days (for a variety of reasons). And it appears that President Obama is losing his cool concerning the agreement and its critics. In a press conference with Malaysian Prime Minister Najib Razak, President Obama lashed out at TPP critics, calling them "conspiracy theorists" whose criticism "reflects lack of knowledge of what is going on in the negotiations." Oh really?

If you take an issue like drugs, for example, the United States does extraordinary work in research and development, and providing medical breakthroughs that save a lot of lives around the world. Those companies that make those investments in that research oftentimes want a return, and so there are all kinds of issues around intellectual property and patents, and so forth.

At the same time, I think we would all agree that if there’s a medicine that can save a lot of lives, then we’ve got to find a way to make sure that it’s available to folks who simply can’t afford it as part of our common humanity. And both those values are reflected in the conversations and negotiations that are taking place around TPP. So the assumption somehow that right off the bat that’s not something we’re paying attention to, that reflects lack of knowledge of what is going on in the negotiations.

But my point is you shouldn’t be surprised if there are going to be objections, protests, rumors, conspiracy theories, political aggravation around a trade deal. You’ve been around long enough, Chuck — that’s true in Malaysia; it’s true in Tokyo; it’s true in Seoul; it’s true in the United States of America — and it’s true in the Democratic Party.

Um. You know why those complaining may "lack knowledge of what is going on in the negotiations"? Perhaps it's because the USTR -- a part of the Obama White House -- has insisted that the entire negotiations take place in complete secrecy with no transparency at all. If President Obama doesn't want conspiracy theories about the agreement, and wishes that its critics were more informed about the negotiations, he can change that today by instructing the USTR to release its negotiating positions and promise to make all future negotiating positions public.

But he won't do that. Why? Because the USTR has admitted that if the public knew what was going on with the TPP, it wouldn't support the agreement. And so the negotiations continue in secret. And the President Obama gets frustrated about a lack of knowledge and conspiracy theories? Really?

At the beginning of 2012, about 20 WTO members (the EU counted as one) calling themselves "The Really Good Friends of Services" (RGF) launched secret unofficial talks towards drafting a treaty that would further liberalize trade and investment in services, and expand "regulatory disciplines" on all services sectors, including many public services. The "disciplines," or treaty rules, would provide all foreign providers access to domestic markets at "no less favorable" conditions as domestic suppliers and would restrict governments' ability to regulate, purchase and provide services. This would essentially change the
regulation of many public and privatized or commercial services from serving the public interest to serving the profit interests of private, foreign corporations.

The Australian government's TISA page fills in some details:

The TiSA negotiations will cover all services sectors. In addition to improved market access commitments, the negotiations also provide an opportunity to develop new disciplines (or trade rules) in areas where there has been significant developments since the WTO Uruguay Round negotiations. There negotiations will cover financial services; ICT services (including telecommunications and e-commerce); professional services; maritime transport services; air transport services, competitive delivery services; energy services; temporary entry of business persons; government procurement; and new rules on domestic regulation to ensure regulatory settings do not operate as a barrier to trade in services.

If that sounds familiar, it's because very similar language is used to describe TAFTA/TTIP, which aims to liberalize trade and investment, to provide foreign investors with access to domestic markets on the same terms as local suppliers, to limit a government's ability to regulate there by removing "non-tariff barriers" -- described above as "regulatory settings" -- and to use corporate sovereignty provisions to enforce investors' rights.

Once more, the rising economies of the BRICS nations -- Brazil, Russia, India, China, South Africa -- are all absent, and the clear intent, as with TTIP and TPP, is to impose the West's terms on them. That's explicitly recognized by one of the chief proponents of TISA, the European Services Forum:

the possible future agreement would for the time being fall short of the participation of some of the leading emerging economies, notably Brazil, China, India and the ASEAN countries. It is not desirable that all those countries would reap the benefits of the possible future agreement without in turn having to contribute to it and to be bound by its rules.

The Australian government's page reveals that there have already been five rounds of negotiations -- all held behind closed doors, of course, just as with TTIP and TPP. The Public Information Session taking place in Geneva this week seems to mark the start of a new phase in those negotiations, at least allowing some token transparency. Perhaps this has been provoked by the growing public anger over the secrecy surrounding TPP and TAFTA/TTIP, and fears that the longer TISA was kept out of the limelight, the worse the reaction would be when people found out about it.

from the speak-up dept

A bunch of organizations and companies have teamed up to demand that President Obama Stop the Secrecy around the Trans Pacific Partnership (TPP) agreement. With over 2.8 million signatures already, the groups behind this project are projecting a "stop the secrecy" light on buildings around Washington DC to draw attention to the shady, underhanded nature of the way that these trade agreements are negotiated. The campaign kicked off by shining the message on the Canadian embassy:

The organizers note that as the campaign goes on and more people sign, they'll be shining the message bigger and brighter -- and on bigger targets.

While this may be a bit gimmicky, the message here is a serious one. It makes absolutely no sense at all that negotiations like the TPP are done in secret. All of the excuses the USTR gives about this wither under scrutiny. Plenty of other international agreements are negotiated with public texts being shared. The USTR could easily do the same if it chose to. The very fact that former USTR Ron Kirk admitted that they won't reveal the details of these agreements because the public might not like them explains exactly why this kind of secrecy is undemocratic.

from the a-big-pat-on-the-back dept

For the past five years or so, the USTR's chief intellectual property negotiator has been Stan McCoy. McCoy has long positioned himself as an intellectual property maximalist, repeating talking points from lobbyists regularly, while condescending to anyone who questions the legitimacy of those claims. McCoy famously was the chief negotiator behind the US's disastrous (and mostly failed) attempt to push ACTA through, as well as the lead on the TPP's intellectual property chapter -- a chapter so bad it may help sink the TPP agreement. In fact, previous reports have noted that McCoy's bullying and aggression in trying to push through the TPP were angering others in the negotiations. McCoy also has a long history of mocking public interest advocates, while praising maximalists for similar tactics. From a report a few years ago concerning a hearing that McCoy chaired:

The burden of proof was very obviously on the public interest, civil society groups. Stan McCoy of the USTR, who was presiding over the hearing, joked about the two-phonebook-sized submission by the International Intellectual Property Alliance. (Lol?) Sadly, there is no independent verification of these industry reports and there were no tough questions for industry regarding their testimony. Several times, McCoy interrupted civil society groups’ testimony to chide them on speaking too generally about IP policy, but refrained when industry witnesses did the same.

Given all that, it should be no surprise at all that McCoy, the failed strategist behind ACTA and the TPP's IP provisions... has received his reward and pat on the back from the industry: a shiny new job at the MPAA. As Tim Lee notes in that link, this is just the latest in the never-ending revolving door between maximalist lobbying groups and the USTR:

Last year I wrote that at least a dozen former senior USTR officials have moved to industry groups that favor stronger protections. McCoy's hire makes it a baker's dozen. Previous hires include including Greg Frazier, who (according to his LinkedIn page) spent 8 years as the executive vice president of the Motion Picture Association of America after a stint at USTR. Other former USTR officials took jobs at drug and medical device companies.

McCoy's old job, assistant USTR for intellectual property and innovation, made him the Obama administration's highest-ranking trade negotiator on patent and copyright issues. Jamie Love, director of the public interest organization Knowledge Ecology International, notes that this isn't the first time USTR's top intellectual property official has gone on to take a lobbying job. McCoy's predecessor, Victoria Espinel, is now the head of the software industry group BSA.

Espinel's predecessor at BSA was Robert Holleyman, the man Obama just nominated to a senior post at USTR. While at BSA, Holleyman supported the controversial Stop Online Piracy Act, which would have created an official internet blacklist to aid in anti-piracy efforts. (He backtracked a few weeks later after an uproar in the technology community.

Another of McCoy's predecessors as USTR's top IP official is Joe Papovich, who later spent seven years as a lobbyist for the recording industry.

As Lee notes, the revolving door between maximalist lobbying organizations and the USTR goes round and round, with USTR officials joining the lobbyist organizations and then going back to the USTR. It's a clear case of regulatory capture by the industry. None of those folks go on to public interest or civil society groups, nor does the USTR ever seem interested in hiring those people. It's entirely a one-sided effort to help out the biggest lobbying interests. Work for a few years pushing through policies that favor those companies, and then get "rewarded" with a nice, high-paying job for those very same lobbyists, and no one ever seems to point out the obvious corruption in the entire process.

As Lee notes, as easy as it is to ascribe comic-book levels of ill-intent here, that's unlikely. McCoy and others genuinely believe what they're doing is the right thing. But the end results are clear:

I doubt public servants like McCoy consciously pursue dubious policies in an effort to curry favor with future employers. McCoy's press representative hasn't responded to my interview request, but I assume McCoy sincerely believes the Hollywood-friendly policies he advocated at USTR were in the interests of the nation.

But the revolving door between USTR and industry groups creates a strong but subtle pressure on USTR's culture. Like many government agencies, USTR regularly turns to outside experts to help it sort through complex trade issues. Naturally, they turn to people they trust: their former colleagues — or even former bosses — who now work at trade organizations with plenty of resources to devote to understanding the minutia of trade policy.

And it's even worse than that, frankly. Because, when you combine that revolving door, with the proposals seen in ACTA, TPP and elsewhere, it undermines the public trust in all of this. People see it and naturally assume corruption, even if the intent is pure. In other words, even if we give McCoy and others the benefit of the doubt, the very fact that he spent 5 years pushing entirely for the MPAA's policies, while brushing off any and all claims from the MPAA's critics, and then took a job at the MPAA, confirms in the minds of many people that the USTR has no interest in representing the public good. And that perception (regardless if the underlying intent is real or not) corrodes public trust in the federal government, and the USTR in particular.

from the getting-it-right-second-time-around dept

Last fall, many folks who follow these issues were somewhat dismayed by a weird NY Times editorial that appeared to endorse the Trans Pacific Partnership (TPP) agreement, while basically ignoring the many complaints about it. It wasn't exactly a ringing endorsement, but it did clearly support the agreement, concluding with:

A good agreement would lower duties and trade barriers on most products and services, strengthen labor and environmental protections, limit the ability of governments to tilt the playing field in favor of state-owned firms and balance the interests of consumers and creators of intellectual property. Such a deal will not only help individual countries but set an example for global trade talks.

The endorsement resulted in the Times being rightly mocked for endorsing a secretive agreement that the NY Times editorial writers had not seen (indeed, could not see). Apparently, some folks on the editorial staff took at least some of this criticism to heart, and have now released a new editorial that is much more critical of the TPP -- in particular, the process around it.

That is, while the editorial still (rightly, in our opinion) supports the idea of lowering key trade barriers, it finally acknowledges that a lot of what the TPP is doing has little to do with removing trade barriers, and plenty to do with helping corporations push through global regulations that it could not get adopted domestically. Furthermore, it directly takes on the fact that the USTR is ridiculously secretive on the negotiation with everyone except big businesses that have direct access:

The Obama administration has revealed so few details about the negotiations, even to members of Congress and their staffs, that it is impossible to fully analyze the Pacific partnership. Negotiators have argued that it’s impossible to conduct trade talks in public because opponents to the deal would try to derail them.

But the administration’s rationale for secrecy seems to apply only to the public. Big corporations are playing an active role in shaping the American position because they are on industry advisory committees to the United States trade representative, Michael Froman. By contrast, public interest groups have seats on only a handful of committees that negotiators do not consult closely.

That lopsided influence is dangerous, because companies are using trade agreements to get special benefits that they would find much more difficult to get through the standard legislative process. For example, draft chapters from the Pacific agreement that have been leaked in recent months reveal that most countries involved in the talks, except the United States, do not want the agreement to include enforceable environmental standards. Business interests in the United States, which would benefit from weaker rules by placing their operations in countries with lower protections, have aligned themselves with the position of foreign governments. Another chapter, on intellectual property, is said to contain language favorable to the pharmaceutical industry that could make it harder for poor people in countries like Peru to get generic medicines.

The editorial further notes the problematic "corporate sovereignty" provisions that allow companies the ability to sue countries for regulations they dislike, noting how it could be abused by banks to block financial regulations (as an example). It further questions some of the predictions of economic benefits from these agreements.

Towards the end, it notes (as many of us have been pointing out for years) that the Obama administration, and the USTR in particular, only have themselves to blame for this mess:

To a large extent, the administration has only itself to blame. By keeping secret so much information about trade negotiations, which have ceased to be purely about trade matters like tariffs and quotas, the government has made itself a target for criticism. Mr. Obama and Mr. Froman argue that their critics have misunderstood or misrepresented their intentions. But that is precisely why the president should provide answers to the questions people have raised about these agreements. It is time for him to make a strong case for why these new agreements will be good for the American economy and workers.

Of course, considering how many times this has been pointed out, and the USTR's only response is to push out blatant misrepresentations of the truth, it seems unlikely that anything is going to change any time soon.

from the at-most dept

As people have begun to learn about corporate sovereignty through plans to include it in TAFTA/TTIP, the European Commission has been trying to scotch the idea that it might allow corporations to dictate policies to nations. Here, for example, is a comment in the Commission's main TTIP FAQ, which tries to answer the question "Why is the EU including Investor to State Dispute Settlement in the TTIP?":

Including measures to protect investors does not prevent governments from passing laws, nor does it lead to laws being repealed. At most, it can lead to compensation being paid.

Those are all true statements in theory, but that's probably not much comfort to Romania, which has been discovering the harsh reality in the long-running discussions over whether to allow a Canadian company to create a huge open-cast gold and silver mine in the country. Here's what happened last year:

Gabriel Resources Ltd. (GBU), backed by billionaire hedge-fund manager John Paulson, threatened to seek as much as $4 billion of damages should Romanian lawmakers vote to oppose its gold mine project in the country.

"We have a very, very robust case, and we believe we have claims up to $4 billion that we can send to the Romanian state," Gabriel Resources Chief Executive Officer Jonathan Henry said today in a telephone interview. "We will go ahead and do that if the vote is against."

As the European Commission notes, the existence of a bilateral investment treaty with Canada that includes a dispute settlement mechanism did not, in itself, stop the Romanian politicians from blocking the gold mine project in the parliamentary vote, which took place in December 2013. So everything's fine, right? Democracy prevailed, and the people were heard. After all, "at most", as the FAQ helpfully reminds us, Romania will have to pay $4 billion damages at some point.

Except that, for a country with a GDP of less than $200 billion in 2013, this represents 2% of the country's entire economic production. That seems an incredibly high price to pay for the exercise of basic democracy. The danger is that faced with the threat of such enormous fines, other parliaments will lack the courage shown by Romanian's politicians, and choose to ignore the will of their people by meekly acquiescing to corporate demands.

Does GBU deserve some compensation if a project is cancelled by the local government because of widespread public concerns about its safety? Perhaps -- although business always involves some risk, and foreign investment is no different. If a company is really worried about that aspect, it can take out insurance -- from the World Bank, for example. Does GBU deserve to be awarded 2% of a country's GDP, paid for by the citizens of a land struggling to raise its living standards? That hardly seems fair. And yet it's precisely what ISDS could allow, because the arbitration panel that decides such corporate sovereignty cases is unconstrained in what it can award, and not at all concerned with what the knock-on effects might be.

But the politicians making up the European Commission should be, since they are supposed to represent the 500 million European citizens that pay their salaries. The fact that they are pushing as hard as they can for ISDS in TAFTA/TTIP shows which side they are really on, and that they are quite happy to put corporations before nations, and profits before people.